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Argentina's Biggest Futures Market Plans to Join Bitcoin Party

(Bloomberg) -- Argentina, one of the fastest nations to adopt bitcoin, wants to stay at the forefront of the cryptocurrency market.

The most important futures market in the country, the Mercado de Termino de Rosario, known as Rofex, is considering offering services for investors in digital currencies. Conversations, which started six months ago, and preliminary drafts include offering custody services for the digital asset and the possibility for clients to use bitcoin as collateral in futures trading.

Although the approach to clients is "still in a laboratory stage," with blockchain services and others related to cryptocurrencies as possibilities, "our idea is to make an announcement before the end of the year," Rofex head Diego Fernández said in an interview with Bloomberg News. A custody service could be underway in 2018, and "accepting bitcoins as a guarantee of futures contracts," would be the next stage, he added.

Rofex’s interest comes amid a global cryptocurrency boom, where the sector’s market capitalization ballooned to more than $190 billion from $ 12 billion at the beginning of the year. Bitcoin, the biggest digital currency, has appreciated more than 630 percent so far this year, and developers around the world have created smaller currencies in an effort to emulate its success.

Bitcoin reached another record today, crossing $7,000 for the first time, after CME Group Inc., owner of the world’s largest exchange, announced this week that it plans to launch bitcoin futures before the end of the year. The decision contrasts with a harder approach from authorities in some Asian nations, with China and Korea banning cryptocurrency exchanges and initial coin offerings.

The Chicago Board Options Exchange said in August it’s also exploring bitcoin derivatives opportunities, while the Commodity Futures Trading Commission in July registered the cryptocurrency trading platform LedgerX, as the first federally regulated cryptocurrency derivatives exchange and clearinghouse.

Future of Futures

Bitcoin earns fast followers in countries with histories of inflation and devaluation of their currencies as it helps preserve the value of investments and savings. The cryptocurrency is equally attractive in countries with currency controls as it allows international transfers without the control of central banks or the financial sector.

The digital currency began to gain popularity in Argentina as of 2012, after the then President Cristina Fernandez de Kirchner tightened currency controls and inflation debased the Argentine peso.

This year the volume of bitcoins operated in Argentina increased to a record 2.1 million pesos in the week ended June 17, more than four times the volume operated in the same period last year, according to Local Bitcoins, a platform for peer-to-peer bitcoin exchange. The volume has remained high, with 1.5 million pesos traded last week.

Interest for the cryptocurrency may be here to stay and expand to other areas of the economy. Following the steps of the CME, Rofex doesn’t rule out offering bitcoin futures, although according to Fernandez the idea is still incipient.

"I would clearly like to do bitcoins futures, because it’s our core business," Fernandez said. However, the idea would have to be approved by the regulatory authority, the National Securities Commission, known as CNV, "and this involves a longer process and the need to build an index or a reference value."

For its part, Caja de Valores, the depository of Argentine securities, is studying opportunities to use blockchain, the technology on which cryptocurrencies are based. "We are exploring blockchain solutions," explains Alejandro Berney, president of the company. "In our case the applications will be services, such as voting in assemblies, and not coins."